Tower Resources (LON:TRP) has formally been issued with a renewal of its licence covering Exploration Area 5, which lies at the northern end of the Albertine Graben in north western Uganda.

The Ugandan Minister of Energy and Mineral Development accepted the application, which follows two disappointing wells drilled on the acreage by Tower during the last 12 months. Shares in the company collapsed from 4.5p to 1.4p at the end of February following the second dry hole. Today, the stock was up 1.6% to 1.5p.

As part of its licence renewal, Tower has relinquished an area of 2,941 sq km and will now spend another two years analysing the licence. Talks between the company and the government are ongoing, but the but the first year of activities is expected to be focused on geophysical operations to determine prospects for drilling early in the second year.

Tower’s earlier wells in Uganda included Iti-1 last May followed by Avivi-1 earlier this year. Undeterred by the lack of a decent oil find, the company said the latest well information demonstrated that “considerable exploration potential still exists in the licence”.

Tower also has major interests in Namibia where a 3D seismic survey is slated to begin in early May ahead of planned drilling towards the end of 2011.

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